Bull s
JK Holdings
Quarterly Report

April,2021
CONTENTSInternational

P1P2P3P462No.

Overview of the Financial Results for JKHD for theThird Quarter of Fiscal Year Ending March 2021
Japan Kenzai supplied laminated lumber
for the Japan National Stadium's large roof
Prospect of Business Condition for
April − June
Market Outlook of Plywood
Tree planting in KEY TEC's Forest commemorating the start of the Reiwa era
Japan Kenzai Fair 2021 held as an online
exhibition in conjunction with real events
held nationwide

Overview of the Financial Results for JKHD for theThird Quarter of Fiscal Year Ending March 2021
The number of housing starts for 2020 was approximately
621,100 units (down 9.9% from a year ago) as of December
31, 2020, the last day of the third quarter of JKHDʼs consolidated year. Housing starts for the owner-occupied, which
is our main market, decreased 10.0% to 201,100 units. Thedecline was slightly smaller than in the second quarter.

Keiichiro Aoki

President
JK Holdings Co.,Ltd.

Under these circumstances, we have been operating thebusiness carefully, taking many measures against the corona

wood Plant, which started operations last spring, as well aspandemic. At the same time, we have examined the measures

to an increase in gross proﬁt margin across the board and alisted in our medium-term management plan "Breakthroughdecrease in administrative, general and sales expenses.

21" to enhance our internal organization. The results for theOrdinary proﬁt increased 0.4% year-on-year to 3.927 billion

third quarter were as follows.

yen due to the receipt of employment adjustment subsidies for
The consolidated business results declined 8.9% from a year

the coronavirus pandemic. Net proﬁt for the quarter attribut-

ago to 255.118 billion yen in sales, which remained smaller

able to the parent company shareholders grew 4.8% to 2.371

than the fall in housing starts. In terms of proﬁts, operating

billion yen due to gains on sales of idle properties and nega-

proﬁt was 4.061 billion yen (down 2.7% year-on-year), a

tive goodwill from M&As, which were recorded as extraor-

smaller decrease compared to the drop in sales, thanks to an

dinary gains. As a result, the full-year forecast for the current

increase in the operation rate of KEY TEC Yamanashi Ply-ﬁscal year was revised upward.

Summary
Wooden Structure Building Oﬃce

Japan Kenzai supplied laminated lumber
for the Japan National Stadium's large roofof Japan Kenzai Co., Ltd. provides
comprehensive support for wooden
constructions, from wooden structuraldesign to construction management.
As your partner with accumulated
experience and knowledge, we haveestablished a system in supporting you
to build medium- and large-scale wooden structures, as well as dispatching avariety of information.

Photo courtesy of Taisei CorporationBulls International No.62

2Survey

other building companies) and an indexof minus 38.0 points among distributors. The degree of negative index kept
shrinking from the previous survey, but
it has yet to reach the previous year'slevel.

Prospect of BusinessCondition for
April - June

The survey found a shrink of the marginof decline following the previous forecast for January to March 2021, as thestate of emergency to stem the spreadof the coronavirus was scheduled to belifted in March. (The survey respondents estimated a sharp drop to minus
67.0 points for the period after the ﬁrst
state of emergency which was lifted inMay 2020.) More and more businesses
have been accustomed to taking measures against the pandemic and actively
seeking new sales methods. It remains
to be seen how this recovery trend willdevelop in the future, and we should
keep an eye on the next survey.

<Demand Forecast by
Builders and Distributors>
Housing starts for January to December
2020 totaled 815,340 units, 90.1% of
the previous yearʼs result. By owner/
occupant, all sectors saw a decline
year-on-year. The number of owner-occupied houses dropped to 90.4%, rental
houses to 89.6％ , and houses built forsale to 89.8%. Over the course of theyear, rental houses and houses built forsale decreased from the previous yearʼsresults, whereas owner-occupied homes
turned upward for two consecutive
months in November and December,indicating a recovery.

<Sales Forecast by Leading
Manufacturers>

Under such circumstances, the demand
forecast survey for April to June 2021
shows an index of minus 34.5 points
among small builders (contractors andAmong the sales prospects by leading
manufacturers, all the sectors foundmore expectations for growth comparedto the previous survey
results, or less forecast
for decline.
The plywood and wooden building materials
sectors showed growth
expectations after they
-34.5
saw 0% increase in their-46.0
prediction in the previous survey. The ceramics & insulation sector
also expects a growth of-65.4

Demand Forecast by Builders
100-10

1.0

5.1

2.0
-7.3

-20

-18.3

-30
-40
-50
-60
-70

-67.0

-80 Apr-Jun

Oct-Dec
2019

2019

Apr-Jun2020

Oct-Dec
2020

Point0=business result in April-June,1992

0-10

1.9

4.9-6.4-20

As for the current status of remodeling,
the number of medium to large projects
with average sales of 2.5 million yen or
more is increasing. It seems that largescale remodeling to accommodate newlifestyles after the coronavirus is growing. The Green Housing Point Systemis scheduled to start accepting applications in April, which is expected to be
used for remodeling works as well. We
hope that promotion of the system will
help to create more demand.

6560-15.455
50-30-40-48.5-50-60-70-80We surveyed the impact of the corona
pandemic on the targeted companies,
just as we did when the ﬁrst state of
emergency was issued last spring. The
percentage of those who answered“greatly aﬀected” was 11% this time,
while it was 36% in the past forecast
for July-September 2020. The postponement of building contracts had less
impact this time; those contracts whichwere postponed for more than threemonths away shared 48% this time,
whereas 60% in the past survey. On
the other hand, more than 60% of therespondents predicted an increase in thenumber of bankruptcies and closuresof their clients, indicating that they areworried about the impact of the pandemic to be prolonged.

Dealing Volume of Lumber

9.2

10

<Various Topics and Current Status of Remodeling>

The forecast survey for April to June 2021 is based on the totaled data
gathered from 3,000 client companies in Japan through the Internet, which
took place from late-January to mid-February 2021.

Apr-Jun2021

Demand Forecast by Distributors
207.9% compared to the previous survey,and the housing equipment sector forecasts an expansion of 21.4%. They havemore projections for increase, being on
a recovery track.

-68.6
Apr-Jun2019

Oct-Dec
2019

Apr-Jun
2020

-38.0

40

-66.7

Oct-Dec
2020

Laminated lumber
Solid lumber
Precut lumber
LVL

45

35 Apr-Jun

Apr-Jun2021

2019

Point0=business result in April-June,1992

Oct-Dec
2019

Apr-Jun2020

Oct-Dec
2020

Apr-Jun
2021

Point100=all responses expect increase

Sales Forecast by Major Supplying Manufacturers（Apr-Jun 2021）
increaselevel-offdecreaseover15％14 ～ 10％

below10％

below10％10 ～ 14％

over15％

0.0

9.1

27.3

45.4

9.1

9.1

0.0

0.0

0.0

27.833.3

22.2

11.1

5.6

0.0

3.3

13.3

30.0

40.0

6.7

6.7

House Equipments（9firms）

3.6

0.0

32.1

39.3

17.9

7.1

0.0

average

0.9

3.1

25.1

37.0

22.3

8.5

3.1

Plywood（13firms）
Wooden Building Materials（10firms）
Ceramic/Heat Insulation（15firms）

International No.62

Trend
Market Outlookof Plywood<Trend of Domestic Plywood>
Japanʼs production of softwood plywood was 244,557 cubic meters (94.8%
of the result in the same month of theprevious year) in January 2021, andshipment was 249,039 cubic meters(97.0%). Inventories have been gradually decreasing to 107,598 cubic meters(83.3%) since the peak in May 2020.
Manufacturers remain bullish formaintaining their prices due to the low
inventories, but a sense of scarcity inthe market is being resolved as theaccumulated backlog of orders has beenﬁlled.
As March coincides with the end of theﬁscal year for distributors with stronger
sales incentives, the market prices arelikely to remain ﬂat for the time being.
The key will be how manufacturers canproduce items based on the supply-demand balance for the future.

Topics[Outline]
On October 3, 2020, KEY TEC Co.,
Ltd. planted trees in a proﬁt-sharing
national forest commemorating theenthronement of the Emperor as part ofthe celebrations. The forest is located in
Saku City, Nagano Prefecture.
KEY TEC signed a contract for theproﬁt-sharing aﬀorestation project with
the Forestry Agency's Chubu Regional
Forest Oﬃce on May 27, 2019 withthe aim of promotion for recycling ofresources while cooperating with thelocal communities for development offorestry.
The aﬀorestation project is a memorable initiative for KEY TEC in 2079.

Bulls<Trend of Imported Plywood>

was 48,160 cubic meters (71.7%).

Japanʼs import of plywood was 213,428
cubic meters (88.2% of the result inthe same month of the previous year)
in January 2021, which turned upward(121.2%) from the results of 175,991
cubic meters in the previous month.
Looking at the result by country of origin, the amount of import from Malaysia was 77,688 cubic meters (123.0%),that from Indonesia was 65,491 cubicmeters (73.6%), and that from China

Despite more arrivals in January, theport inventory is extremely low andthere remains the sign of shortage.
Importers are trying to raise prices bycarefully selling their scarce inventories to keep up with the skyrocketingpurchase costs. The trend of price hikes
due to product shortage is expected tocontinue, as a signiﬁcant increase inarrivals is hardly expected for the time
being.

Wholesalers' Prices of Plywood in Tokyo

yen/sheet

2000
Structural Use 12mm JAS F4☆
Concrete Form 12mm JAS
Softwood Plywood for Structural Use 12mm JAS F4☆
Softwood Plywood for Structural Use Neda-non 24mmwith tongue JAS F4☆

1500

1000

500

Sep 2020

Oct 2020

Nov2020

Dec2020

Jan2021

Feb2021

Tree planting in KEY TEC's Forest
commemorating
the start of the Reiwa era
The company would like to hand overthe baton to the younger generation
who will be in charge in 60 years' time,and make sure that the cross-generational project succeeds.
[KEY TEC's Forest]
Location: Ri 114 Tateshina National
Forest, Saku City, Nagano Prefecture
Aﬀorested area: 4.04 hectares

Planted species: 9,730 saplings of larch
Contract period: 60 years until 2079

A total of 12 people participated in the event.

Contract: The scene at the time of the contract
for the profit-sharing afforestation project*The profit-sharing afforestation in national forests
is a system under which afforestation bodies, who
are other entities than the national government,
plant trees in national forests under contract andcultivate them for a certain period of time in order
to sell the grown trees. The sales proceeds areshared between the national government and theafforestation bodies at a certain rate agreed uponin advance. It can be used as part of social andenvironmental contribution by companies andorganizations to forest improvement.

3

4Bulls International No.62CompanyJapan Kenzai Fair 2021 held as an online exhibitionin conjunction with real events held nationwide
Japan Kenzai Co., Ltd. held Japan
Kenzai Fair for 3 days from March 17(Wednesday) to 19 (Friday). This year,
the venue was reproduced in virtual
space under the name of “Japan Kenzai
Fair Online Exhibition”. Held twice ayear since 1978, the trade exhibition
was held online for the ﬁrst time. Sales
during the 3 days totaled 1.33 billion
yen, and the number of visitors was15,489.
At the Japan Kenzai Fair Online Exhibition, the exhibition hall was set up in a virtual space

Also during the exhibition, real eventswere held in a number of locations
nationwide in line with the online
exhibition. These events included thefollowing.
The venue of one of the events wasthe Johoku Oﬃce (Yashio Logistics
Center) in Yashio, Saitama Prefecture,
which is usually responsible for storage and distribution of lumber. Making
use of the venue as an actual locationof storing inventory, this closely located sales oﬃce was used as a space tohold the event. 10 companies including
Japan Kenzaiʼs own brand set up exhibits. While visitors were being informed
about products at the exhibit booths,
lively transactions were being conducted at the business meeting space set up
in the center of the venue.
At the same venue, videos of seminars
that were held during the exhibition
could be viewed, and visitors intently
listened to the explanation about the“Green Housing Points System”. Outside the venue, visitors carefully viewed
the exhibited lumber, and business wasin full swing. The number of visitors
was 85, and sales amounted to 14.36
million yen.
The company's headquarter in Koto
Ward, Tokyo, focuses mainly on settingup exhibits. 3 types of washrooms thatare being developed as theﬁrst part of the companyʼsselected building materials
project called “moki” which
will be launched in April
were exhibited. Developedby a team of members
made up of women, thestylish washrooms, whichtake functional and storage
aspects into consideration,
could be observed in detail.

Head Oﬃce (Koto Ward, Tokyo)"moki", the selected building material Three different wash spaces were displayed

On another ﬂoor, the Bulls
Package Theater Room,which packages together
sound insulation, acoustic
design, equipment, andinterior items related to ahome theater, was set up.
A space where powerful
acoustics could be actuallyexperienced was provided.
In addition, a counter tooﬀer support to construction
businesses was also set up,
Johoku Oﬃce (Yashio Logistics Center)and assistance in creating
The booths of various companies lined up around the central business meeting spacecalculations for energy
Total sales at the real events held nasaving as well as a manual concerning
tionwide during the exhibition period
the Revised Energy Conservation Act
amounted to 570 million yen, and thefor Buildings were oﬀered by the JK
number of visitors was 4,344. ExpecSupport Center of Japan Kenzai. Thetations are rising for the next Japan
number of visitors during the 3 dayKenzai Fair.
period was 49.

Wood Land Tower 1-7-22 Shinkiba Koto-ku,Tokyo 136-8405 Japan
Phone +81-3-5534-3800 Fax +81-3-5534-3833
E-mail kouhou@jkhd.co.jp
URL http://www.jkhd.co.jp
C 2018JK Holdings Publication Copyright○